Clarifying questions:
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Are we planning launch Self-driving cars for the first time or will it exist with the current set of cars in the recent future?
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Assuming this for the initial launch
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Car hailed by a standalone app or by existing tech product?
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Assuming via Google maps
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Self-driving cars will serve the need for passenger/personal transport and not freight, delivery, etc.
High-level equations:
# of cars = (Peak demand for cars per day)/ (Capacity of each car)
Assuming each car’s capacity is 4 passengers.
Peak demand for personal cars = Demand in urban + demand in rural areas
Let’s calculate TAM for self driving car:
US population is 300M, our target users are in the range 15-65
Assuming the average life expectance of 80 years, the target user count is:
40/80*300M = 150M users
Of this, I am assuming 50% will continue using their personal cars for commuting. Of the remaining 50%, I am assuming 80% will have the financial means to actually request an SDC (Since in 1 out of 8 in the US is considered poor). This leaves our TAM to be 0.8*75M
Of these 60M users, 20% of the US is urban and 80% of the US is rural.
12M urban and 48M rural
For the initial launch, the self-driving car may not get complete attention due to worry about new technology. I am assuming that initially for the first few months the adoption rate will be around 40% in urban cities and 10% in rural cities.
Thus TAM will be 4.8M urban and 4.8M rural. → 9.6M total
Assuming this peak demand for 12M cars over a 24-hour time frame. Also assuming each self-driving car will take 20 mins to complete ride for 1 passenger.
In one hour an SDC can complete 3 rides/passengers. In 24 hours it can complete, 72 rides.
Thus in order to serve a peak demand of 9.6M, we need → 9.6M/72 ~ 150K self-driving cars would be needed for initial launch.
Any feedback on my approach and assumptions?
(edited)
Thanks for your feedback.